New York City's Unincorporated Business Tax (UBT):

Who Must File — Who Must Pay

The Unincorporated Business Tax (UBT) is imposed on any individual or unincorporated entity that is carrying on or currently liquidating a trade, business, profession, or
occupation within New York City. Effective tax years beginning 2009, as influenced by the efforts
of the Freelancers Union Political Action Committee, the New York State legislature enacted many
favorable changes to the UBT. The first change was who must file a UBT tax return. The new
legislature requires an individual or unincorporated entity that has gross receipts greater than
$95,000 to file the UBT return.

Even more favorable, was the change of who must ultimately pay the 4% UBT tax. Any person whose net
self employment earnings from NYC are $100,000 or less receives a UBT tax credit which offsets the
UBT tax in full and results in no UBT tax due. A gradually phased out partial UBT tax credit is
available for persons whose net self employment earnings from NYC are greater than $100,000but less
than $150,000. Any person who has net self employment earnings from NYC greater than $150,000 must
pay the UBT tax and will have no credit to offset their UBT liability.

The chart below illustrates numerous gross income and net income from NYC self employment earnings
scenarios and shows whether that scenario results in a filing requirement or tax due.

Form 1040, Sch. C, Line 7: Gross Income

NYS UBT Return Filing Requirement (y/n)

Form 1040: Sch. C, Line 31: Net Income / Form NYC 202, Line 12: UBT
Business Income

NYC 202, Line 13: Less: Allowance for Taxpayer's Services

NYC 202, Line 15: Less: Exemption

NYC 202, Line 15: UBT Taxable Income

NYC 202: Line 17: UBT Tax

NYS 202, Line 20: UBT Tax Credit

NYC 202, Line 21: UBT Tax Due

50,000

NO

N/A *

N/A *

N/A *

N/A *

N/A *

N/A *

N/A *

75,000

NO

N/A *

N/A *

N/A *

N/A *

N/A *

N/A *

N/A *

95,000

NO

N/A *

N/A *

N/A *

N/A *

N/A *

N/A *

N/A *

95,001

YES

50,000

10,000

5,000

35,000

1,400

1,400

-

100,000

YES

75,000

10,000

5,000

60,000

2,400

2,400

-

150,000

YES

100,000

10,000

5,000

85,000

3,400

3,400

-

200,000

YES

125,000

10,000

5,000

110,000

4,400

2,200

2,200

250,000

YES

140,000

10,000

5,000

125,000

5,000

1,000

4,000

300,000

YES

147,500

10,000

5,000

132,500

5,300

265

5,035

350,000

YES

150,000

10,000

5,000

135,000

5,400

-

5,400

400,000

YES

175,000

10,000

5,000

160,000

6,400

-

6,400

* N/A = No Filing Requirement & No Tax Due

Please note that a credit for NYC UBT tax paid is available to offset NYC income tax on a resident
or part year resident. The credit is equal to 23% or more of the UBT tax paid. Please consult your
tax advisor for further guidance.